National Bank of Greece postpones share issue vote to April 29

Greece’s largest lender National Bank (NBG) has postponed until next week a shareholder vote on its 9.75 billion-euro recapitalisation plan, after too few shareholders turned up to approve it at a repeat meeting.

Wednesday’s assembly required a quorum of 50 percent of all voting shares but just 15.3 percent were present. It is common in Greece for such shareholder votes to be delayed and be approved after two or three meetings.

NBG will hold a second repeat meeting on April 29, which will require a lower quorum of 20 percent.

Hard hit by sovereign debt writedowns and loan impairments, NBG will seek approval to raise up to 9.75 billion euros via a share offering and up to 1.9 billion by issuing contingent convertible bonds, or CoCos.

The bank also plans to reduce the number of its outstanding shares through a 10-for-1 consolidation.

Greece’s four major banks, including NBG, need 27.5 billion euros in new capital to restore their solvency ratios to levels required by the country’s central bank.

Most of the funds will be provided by a state bank support fund – the Hellenic Financial Stability Fund (HFSF) – in exchange for new shares or contingent convertible bonds (CoCos).

Under the terms of the recapitalisation plan agreed with the country’s international lenders, at least 10 percent of banks’ new common equity must be raised from the private sector for them to stay privately run.

CoCos will be issued exclusively to the HFSF rescue fund and banks plan to resort to them if less than 10 percent of their rights issue share offer is taken up by private investors.

Piraeus Bank and Alpha Bank, the country’s second- and third-biggest, are expected to meet the 10-percent target. But Eurobank, the fourth-largest, has given up its fundraising plans, opting instead to fall under full HFSF control.


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